Pine Lawn Bank & Trust Co. v. Urbahns

• Decision Date: 16 May 1967
• Docket Number: No. 32727,32727
• Citation: 417 S.W.2d 113
• Parties: PINE LAWN BANK AND TRUST COMPANY, Plaintiff-Appellant, v. Dale A. URBAHNS and Mrs. Dale A. Urbahns, Marie Stewart and Betty M. Shireman, Defendants-Respondents.
• Court: Missouri Court of Appeals

Page 113

417 S.W.2d 113

PINE LAWN BANK AND TRUST COMPANY, Plaintiff-Appellant, v. Dale A. URBAHNS and Mrs. Dale A. Urbahns, Marie Stewart and Betty M. Shireman, Defendants-Respondents.

No. 32727.

St. Louis Court of Appeals, Missouri.

May 16, 1967.

Motion for Rehearing or for Transfer to Supreme Court Denied

June 14, 1967.

W. W. Sleater, St. Louis, for plaintiff-appellant.

Carl E. Starkloff, Clayton, for defendants-respondents, Stewart & Shireman.

Ziercher, Tzinberg, Human & Michenfelder, Robert C. Jones, Clayton, David J. Tompkins, St. Louis, for defendants-respondents Dale A. Urbahns & Mrs. Dale A. Urbahns.

THEODORE McMILLIAN, Special Judge.

This is an action filed in equity by the plaintiff-appellant, Pine Lawn Bank and Trust Company, hereinafter referred to as appellant, to foreclose an alleged lien on real estate located in St. Louis County. The trial court dismissed the cause of action against all defendants, hereinafter referred to by their individual names; and further declared that a certain Magistrate Court judgment was not a lien against the real estate in question, and that appellant was not entitled to a lien or to foreclosure. Appellant appealed from this judgment.

Originally, the appeal was lodged in the Missouri Supreme Court; however, the Court, on its own motion, ordered the cause transferred to this court for lack of jurisdiction, citing McHolland v. Treadway, 328 Mo. 721, 41 S.W.2d 375, for the proposition that the question of appellant's right to a lien on the land does not involve title to real estate within the meaning of the Missouri Constitution, Article 5, Section 3, V.A.M.S.; Nettleton Bank v. McGauhey's Estate, 318 Mo. 948, 2 S.W.2d 771.

The rules of review attendant upon a case of this nature are well known. We are to hear the case de novo, giving due deference to the trial court's findings on matters involving the credibility of a witness, and to reach our own conclusion as to the facts. Lake Development Enterprises, Inc. v. Kojetinsky, Mo.App., 410 S.W.2d 361, 363(1); Selsor v. Shelby, Mo.App., 401 S.W.2d 169.

Defendants Urbahns claim that the judgment of the trial court should be affirmed for the reason that appellant failed to preserve any error for review. On March 4, 1965, the trial court entered a decree, and thereafter, on March 18, 1965, appellant's motion for a new trial was filed. The court did not rule on appellant's new trial motion; but, on March 29, 1965, on its own motion, set aside the March 4, 1965, decree and entered a new decree. Thereafter, appellant did not file another motion for a new trial nor refile the first one. Appellant appealed from the judgment and decree entered on March 29, 1965. Seizing upon the failure to file a new motion for a new trial, defendants Urbahns say, pursuant to Civil Rule 79.03, V.A.M.R., nothing is preserved for review. Under these circumstances, that rule did not require plaintiff to file another motion for new trial. The motion to dismiss is denied.

On August 3, 1959, defendants, Betty M. Seabaugh, nee Shireman, and her husband, Edward Seabaugh, borrowed $2,805.73 from appellant. The loan was secured by three instruments: (1) the note and (2) the collateral security agreement (both on one document), and (3) a motor vehicle chattel mortgage. Paragraph 9 of the collateral security agreement reads as follows:

'(9) Said Bank may record this note in the office of the Recorder of Deeds of any City or County of any State and thereupon said Bank shall have a lien for its payment upon any interest in any real property or leasehold owned by any maker * * *.' (Emphasis ours.)

At the time of the execution of the note and agreement, defendant Betty M. Shireman was the owner of record of Lot 22 of Lower Ladue Hills, according to the plat thereof recorded in Plat Book 57, pages 2 and 3 of the St. Louis County Recorder's Office, together with all improvements thereon known and numbered as 8589 Harold Drive.

The evidence showed that E. L. Altenbernd, assistant secretary for appellant, handled the loan negotiations. He said that he was present when the Seabaughs signed the note and agreement, and he affixed his signature in two places over the word 'witness' in the presence of the Seabaughs. After default of two payments, Altenbernd, on April 4, 1960, took and exhibited the note and collateral agreement before a notary public. Then he made an affidavit (1) that he personally appeared before the said notary and that the notary knew him (Altenbernd) to be the person described in the note and agreement as a witness; and (2) that the Seabaughs, whose names were subscribed to said instrument as parties, were the persons who executed the same and that Altenbernd subscribed his name as a witness thereto. On the same day, appellant's vice-president, J. T. Dodds, Jr., made an affidavit declaring appellant to be the owner of the note and security agreement executed by the Seabaughs and that said note is 'filed' (sic) for record to establish a lien on the Lower Ladue Hills property. Altenbernd's acknowledgment and Dodd's affidavit were then physically attached to the note and collaterial agreement, and then filed with the St. Louis County Recorder of Deeds on April 19, 1960.

On July 1, 1960, defendant Betty M. Shireman, by warranty deed, transferred the said property to Marie T. Stewart. Miss Stewart, on December 1, 1960, transferred the property to defendant, Dale A. Urbahns, who joined with his wife, aleeta, on July 12, 1961, to convey the property in question to Aleeta and Dale A. Urbahns, wife and husband, who are the present titleholders of record. On July 27, 1961, Betty M. Shireman filed a petition in bankruptcy, and was discharged in bankruptcy on October 2, 1961. Other facts, as needed, will be referred to hereinafter.

Appellant contends that the court erred in the following respects: (1) failure to declare a lien and to order a foreclosure and sale of the property in question; (2) in holding that appellant is not entitled to a general judgment against Betty M. Shireman; and (3) in not allowing appellant attorney fees.

It would be unrewarding and unavailing to consider other issues raised unless we can first establish that the collaterial security agreement either created a lien or, by the occurrence of a condition subsequent, provided the mechanism by which a lien could be established. Consequently, we shall examine, first, this issue pertaining to the lien.

At common law there could be no lien upon land but only on things of a personal nature, the possession of which had been given to lien claimant. Tiffany's Real Property, New Abridged Edition, Section 948; 2 Spence, Eq.Jur. 796. However, with the passage of time, the chancellor in Courts of Equity began to recognize certain rights in land, and in personalty, not based on possession, yet of a character analogous to common law liens; therefore, these came to be known as 'equitable liens.' These rights consist of personal obligations of landowners which equity enforces against the land and which follow the land until they reach those of a purchaser for value without notice. Tiffany's (supra). Of course, around this body of law, certain rules and regulations developed which we shall refer to more fully hereafter. 'Equitable liens,' as stated in 1 Harvard Law Review 55, 65, 66, do not confer proprietary or real rights, but, merely constitute the means by which equity enforces personal obligations. So, with this background, since land is ordinarily the primary fund for the payment of both debts and legacies, the presumption is always to that effect, and a clear intention must be established to charge the land for personal obligations. Wright v. Denn ex dem. Page, 10 Wheat. 204, 23 U.S. 204, 6 L.Ed. 303; In re Powers, 124 N.Y. 361, 26 N.E. 940; Heslop v. Gatton, 71 Ill. 525; Owens v. Claytor, 56 Md. 129.

In recognition of the above principles, Mr. Justice Story in Equity Jurisprudence, Redfield 10th Edition, Vol. II, Section 1231, Page 483, stated:

'Indeed, there is generally no difficulty in equity in establishing a lien, not only on real estate, but also on personal property * * * wherever there is a matter of agreement, at least against the party himself and third persons who are volunteers or have notice; for it is a general principle of equity that as against the party himself, and any claiming under him voluntarily or with notice, such an agreement raises a trust, citing, Legard v. Hodges, 1 Ves., Jr., 478.'

To like effect is Jones on Mortgages, 5th Edition, Vol. I, Section 162, Page 138, where it is said:

'In addition to these formal instruments which are properly entitled to the designation of mortgages, deeds, and contracts, which are wanting in one or both of these characteristics of a common law mortgage, are often used by parties for the purpose of pledging real property, or some interest in it, as security for a debt or obligation, and with the intention that they shall have effect as mortgages. Equity comes to the aid of the parties in such cases, and give effect to their intention * * *.' (Emphasis ours) See also Ketchum v. St. Louis County, 101 U.S. 306, 25 L.Ed. 999 (affirming Ketchum v. Pacific Railway Co.,) Federal case No. 7,740, 4 Dill 187 (note)

The legal prerequisite, which seems to be common to all the decided cases, is that there must be an agreement (contract), formal or informal, which evidences an intention to make the land security for the payment, either of money or an obligation. Walker v. Brown, 165 U.S. 654, 17 S.Ct. 453, 41 L.Ed. 865; Ketchum v. St. Louis County, supra; Chase v. Peck, 21 N.Y. 581; Borden v. Croak, 131 Ill. 68, 22 N.E. 793. In the following case of Smith, Inc. v. Steinberg, Mo.App., 280 S.W.2d 696, 703, the Court, quoting from Jones on Liens, said:

"An equitable lien arises either from a written contract which shows an intention to charge some particular property with a debt or obligation, or is declared by a court of equity...